| TheBigFatJ said: I guess we're just going to have to wait and see whether Nintendo lying to us, as all of those who claim Nintendo is stockpiling are suggesting, or are they struggling to increase production, as Nintendo states. People seem to assume that holiday sales are implicitly more valuable than sales any other time of the year. The fact of the matter is that a Wii sale today is worth more than a Wii sale in five months, and this is for a large variety of reasons. Two of the larger reasons follow: (1) Wii sales are Nintendo's best method of advertising the system. You cannot play it in most stores and you cannot get a feel for it from commercials. Many people who Nintendo want to sell the system to don't even pay much attention to video game commercials because they feel those commercials do not apply to them. (2) Wii sales now will lead to greater profits. You can speculate day and night about who Nintendo will sell units to, but Nintendo ultimately exists to create profit and, by law, they must make decisions that they believe will lead to the most profitability. A Wii sale now has the potential to affect video game sales -- someone who owns a Wii may buy several games before Christmas -- as well as accessory sales. Because of point (1), withholding Wiis will potentially stunt demand. It is expensive for Nintendo to hold Wiis in a warehouse if they could otherwise be selling them. No one offered a compelling suggesting explaining how Nintendo 'winning' the holidays would lead to them making bigger profits. People have simply suggested that sales will magically appear during Christmas that wouldn't otherwise exist. Newsflash: Nintendo isn't having a shortage of potential buyers. It seems most people here who believe in stockpiling are suggesting that Nintendo is putting away 300k-500k/month right now, and will unleash millions during the holiday season. How much does it cost Nintendo to store millions of Wiis? If they're holding back millions of Wiis, that's likely millions or possibly ~10 million of software sales *before* the holiday in addition to whatever happens during the holiday. The longer you can have someone playing your console, the more money you make. Nintendo's sales right now are especially valuable because they're making an impression on third parties. Nearly every week third parties decide which platforms to start new game development on. Don't you think that if Nintendo could unleash an additional 100k units/week on the world wide market and catapult the Wii sales to nearly DS sales, it could affect their decisions and further strengthen Nintendo's market position? The holiday season is revered as so important in the retail world because of the level of demand during that period. If your product sees that level of demand year-round, how important is the holiday season? |
*sigh* You don't have much background in economics or marketing, do you?
This is basic ideas stemming from both of those fields.
A. The cost of stockpiling a million Wii's is minimal. They already own the warehoiuse, they already pay the operating staff, all overhead is already calculated into their annual figures.
B. Advertising via the media. An increase in 50k units per week (or month) at this point would gain Nintendo very little new adverstising in the media regarding its sales rate. But a massive sales spike during the Xmas season will gain Nintendo a media blowout that cannot be purchased. What was 50k in additional sales last summer will be 100k in additional sales next summer because of the hype generated over Xmas.
C. You've completely forgotten about developers and publishers. Most games are sold in the 4th quarter. When do you think they want Nintneo to relase all those consoles? The holidays. It goes beyond that as well. The same perception given to consumers that Nintendo had a sominating holdiay will be impressioned onto devs/pubs as well. This leads to even more 3rd party support and obviously more and better games. No more third string dev teams or outsourcing to Tose.
The rEVOLution is not being televised
